Washington, August 27 -- The U.S. economy grew slower in the second quarter than first thought amid shrinking corporate profits and higher imports, the government said on Friday.
GDP expanded at a 2.8 percent annual rate in the second quarter, down from the 3.0 percent pace estimated in the Commerce Department's report last month.
The revised growth figure, which matched Wall Street expectations, represented a sharp slowdown from the 4.5 percent clip logged in the first three months of the year and was the slowest rate of advance since the first quarter of 2003.
The department said after-tax profits fell 1.2 percent in the April-June period compared with the first quarter. That was the weakest performance since the first quarter of 2003, when corporate profits tumbled 4.5 percent.
The GDP report confirmed inflation pressures were tame in the quarter, with two closely watched price measures scaled back slightly from initial estimates.
The core price index for consumer spending rose at an annual rate of 1.7 percent, a downward revision from an originally reported 1.8 percent pace.
Overall, prices rose at a 3.2 percent annual clip, a notch below the first quarter's 3.3 percent pace and the initial estimate for the second quarter.
The Commerce Department said the downgrade to the GDP estimate was due to an upward revision to imports -- which detract from growth -- and a downward revision to exports.
Investment in inventories as well as in equipment and software also received an upward boost, while consumer spending was bumped up to a 1.6 percent gain, well above the 1.0 percent rise seen last month.
